The different stages of retirement

The life expectancy of Singaporeans is currently at 82, meaning Singaporeans are expected to live longer than before. Therefore, even when you are financially stable and ready to retire, the amount you have might not be enough to last you through your entire retirement years. Careful planning and understand your own needs is crucial to ensure that your retirement funds can last. Here’s what you can do at each stage of retirement to maintain your retirement funds.

Age 55 – 64

When you are at this age, you are most probably still working but you can already smell retirement creeping closer and closer. You are likely to be financially free and have a rough idea of what the rest of the days of your retirement will be spent doing. At this stage, you have to look at your current daily expenses and evaluate if there will be any income to support you once you step out of the workforce. Will your monthly CPF payouts be enough to cover your monthly expenses? Do you have to look at other alternative sources of income to support your current lifestyle? These are questions you can ask yourself before deciding on retiring.

Age 65 – 70

At this stage, you would have probably just retired and this is only the first part of retirement. Your savings and side income should be enough for you to last through this stage comfortably. At this stage, a mistake most retirees make is to go travel the world and splurge their hard-earned savings on material wants such as buying their dream car, going on their dream holiday and spending excessively, thinking that it is only just a small fraction of your savings. All these activities will deplete your retirement funds quickly and you will find yourself going to your children for pocket money in no time. What you can do at this stage is to look for a part-time job, take up an inexpensive hobby such as exercising or going for self-enrichment classes to improve yourself.

Age 70 and beyond

This is the most crucial stage of retirement and the stage that most retirees dread as most of their savings are almost exhausted. At this stage, only those who have made careful planning will have enough funds to last through. This is also a risky stage as the chances of contracting chronic illnesses are higher; entailing higher healthcare costs. This is why you need to purchase health and long-term care insurance to protect yourself against the rising medical costs in Singapore.

In conclusion, you need to plan your retirement funds for at least 30 years ahead as life expectancy rate in Singapore is going up. Careful budgeting and planning will ensure that you have sufficient funds to last you through your retirement years.

Financial mistakes can be made out of ignorance and misinformation. At Summit Planners our advisers are trained and equipped to offer the best financial plans to our clients and advise them against making the three common mistakes.

With the arrival of the golden years, have you decided how you will spend your retirement years? Your retirement years should be enjoyable, especially after decades of hard work building your career and supporting your family.